Flying To the U.K. Next Year? Getting Back Home's Gonna Cost Your A Little More Than This Year

Heathrow Airport, outside London, is the world's third-busiest (and Europe's busiest) airport, serving nearly 68 million passengers annually. And almost every one of them gets charged the U.K. Air Passenger Duty departure tax. The APD for short haul travelers going to destinational in Europe is small. But those flying more than 2,000 miles - including nearly all travelers headed to the U.S. - will see their already sizeable APD tax amounts increased significantly beginning next April. The APD is rolled into the fare price itself, so many, if not most travelers are unaware they're being charged the departure tax on their flights out of the U.K. (Simon Dawson/Bloomberg)

It’s going to cost you more to fly home from Britain next year after Brexit – about $47 more if you fly in coach or in a premium class seat. And that’s before the airlines determine whether they need to raise their actual fares and fees.

Last week, while Americans were preoccupied with the run-up to this week’s mid-term elections and the College Football Playoff Rankings, Philip Hammond, the U.K’s Chancellor of the Exchequer, announced that he’ll be bumping up the tax – called the Air Passenger Duty – charged to nearly all long haul passengers departing the U.K. by as much as 16 pounds sterling. The hike takes effect in April, just after Brexit is scheduled to take effect. The following year, beginning in April 2020, the Duty, or APD as it is colloquially known, will rise again by another 2 to 4 pounds sterling. In following years, the APD will be indexed to inflation. APD is not charged to passengers travel to, or merely changing planes in the U.K.

But while the hike in the APD will happen at almost the same time that the U.K. is scheduled to formally withdraw from the European Union, the tax on departing passengers tax has been around since 1994 and officially is unrelated to Brexit. Rather, the money raised from the APD – nearly $3 billion in the country’s 2017-2018 fiscal year - is supposed to go to combat environmental damage in the U.K. caused by aviation. Naturally, there is some dispute about how much environmental damage is or is not caused by aviation in the U.K. And some critics question the effectiveness of the environmental remediation work that’s being funded by the APD.

Still, though the APD isn’t directly tied to Brexit, some in Parliament have suggested next Spring’s big hike in the APD is necessary to make up for lost E.U. funding of environmental clean-up efforts in Britain. The APD rate hike is expected to generate and extra 700 million pounds annually for the British Treasury by the 2022-2023 fiscal year.

The U.K. also charges an APD to most passengers traveling on short haul flights to points in Europe and other destinations less than 2,000 miles away. But the amounts of those APD charges have been frozen for years at 13 and 26 pounds sterling, respectively for coach and premium class passengers. With only a few exemptions, travelers departing on long haul flights from the U.K. currently pay an APD of about $68 if they travel in Coach and about $137 if they travel in a premium class seat. Though in percentage terms those are small charges compared with low-end economy fares around $1,700 and business class fare around $7,500, they rank among the highest departure taxes charged anywhere in the world.

The U.K.’s APD is considered to be the highest departure tax in the world, though few passengers realize it because by law the tax is rolled into the posted fare price rather than tacked on as a distinct but mandatory additional charge.

Not surprisingly British airlines and travel industry officials are displeased with the planned hike in the APD, especially in light of politicians’ promises to take steps light of Brexit to improve Britain’s competitiveness both as a travel destination and as a place for international companies to establish and grow operations and as a country where they can conduct more business because of its increased market competitiveness.

The 2017 Travel and Tourism Competitiveness Report from the World Economic Forum placed 135th among a total of 136 countries – ahead of only high-priced Switzerland – in terms of travel price competitiveness. That troubling ranking was largely offset by Britian’s overall rank as the fifth most competitive travel market in the world (because of it’s wide array of attractions and price levels plus its wide open access to travelers from all over the world. Still, travel related businesses in the U.K. are complaining that their ability to compete is being undermined by their government’s high travel taxes.

I wrote my first airline-related news story in May 1982 – about the first bankruptcy filing of Braniff International Airways. That led to 26 years covering airlines and related subjects at the Fort Worth Star-Telegram and USA TODAY. I followed the industry through the entir...